A. W. Clausen Center Named for Remarkable Alumnus
Alden Winship Clausen, the namesake of the A. W. Clausen Center for World Business at Carthage, is the former CEO of Bank of America and the World Bank. Mr. Clausen was born in 1923 in Hamilton, Ill., a town of 1,600 on the Mississippi River. His father was the owner, editor, and publisher of the weekly Hamilton Press.
When Mr. Clausen was 6 years old, he appeared in a local school play as a character named “Tom.” Many townspeople began referring to him by that name instead, and the sobriquet has stayed with him throughout his adult life.
‘I’m stubborn, I work hard, and I do my homework’
Mr. Clausen’s youth was shaped by many of the sometimes-underrated virtues of small-town America. His grade school had two rooms; his high-school class, of which he was valedictorian, numbered 29; and he worked at a variety of odd jobs — clerking in a grocery store, helping clean up his church, and operating the linotype for his father’s newspaper. It was a milieu of hard work, determination, perseverance, and self-reliance, and these are virtues that Mr. Clausen himself reflects to this day.
“I’m stubborn, I work hard, and I do my homework,” he said. “When push comes to shove, I usually can rise to the challenge.”
It was also a time that was being shaped by the advent of media — particularly radio — and by growing military threats in Europe and Japan. These facts also shaped Mr. Clausen’s character, particularly his lifelong dedication to internationalism. Mr. Clausen can remember his father and grandfather, both of whom were born in Norway, discussing Japan’s invasion of China, and he can still recall the sound of famous commentator H.V. Kaltenborn’s voice carrying news of the growing Nazi threat.
Carthage provided a ‘secure foundation’
In 1940 Carthage was located just 12 miles from Hamilton. “I’m grateful to Carthage for giving me the secure foundation of a liberal arts education,” said Mr. Clausen.
“I would have been overwhelmed had I gone to the University of Minnesota or the University of Illinois, facing thousands and thousands of students on those campuses,” he said.
Two and a half years after beginning Carthage, he was called into the Army Air Corps and was assigned to the University of Chicago as a pre-meteorology student. Retrospectively assigning his University of Chicago credits to his work at Carthage, he was granted a bachelor’s degree in mathematics “in absentia.” The end of the war in Europe cut short his meteorology curriculum, and he next was sent to Yale University to become a communications officer — a 2nd lieutenant — and then was stationed in Europe.
Returning to civilian life in late 1946, Mr. Clausen enrolled in law school at the University of Minnesota, graduating in 1949. Romance intervened in his life at this point: He moved to Los Angeles to court a high school teacher who would eventually become his wife of 51 years, Mary Margaret Crassweller.
From cash vault clerk to CEO
While in Los Angeles, Mr. Clausen accepted a trainee position as a cash vault clerk for Bank of America. For a while, he clung to the notion that he would still practice law.
As the appeal of banking grew in him, however, he made his commitment to Bank of America, where he rose quickly through the ranks, becoming president and CEO in 1970 at the age of 46.
Under Mr. Clausen’s direction, Bank of America flourished. Assets went from $25 billion to $100 billion, and the bank became the largest commercial bank in the United States, in terms of deposits, assets, and profits. Mr. Clausen’s management style, shaped in part by a stint at Harvard Business School’s Advanced Management Program, eschewed growth for growth’s sake. He decentralized decision making, placing great emphasis on internal communications to gather information and disseminate policy, and, above all, moved the Bank into international banking — pushing it aggressively into offering banking services to clients in Europe, Asia, the Middle East, and Latin America.
In 1981, Mr. Clausen accepted an invitation to become head of the World Bank, “one of the great jobs in the world,” he said. His objective was to translate what he had learned in the “private” sector to the “public” sector. And one of the main lessons he learned at the World Bank, he noted, was how much easier it is to get things done in the private sector (where there are fewer constituencies and stakeholders to appease than in the public sector).
Mr. Clausen was particularly proud of the hand he had in creating MIGA, the Multilateral Investment Guarantee Agency, one of five agencies of the Bank. Established in 1944, The World Bank pursues a mandate of attacking poverty and boosting economic growth in developing countries. MIGA was created to ensure against noncredit risks (e.g., political risks, acts of God, and weather).
‘The world has become increasingly small’
In 1986 he returned to Bank of America, leading it out of a spate of red ink and back into profitability. He refocused attention on serving customers, established new efficiencies in operations, and cut unnecessary expenses. He formally retired as CEO of the bank and its holding company in 1990.
Mr. Clausen was first, last, and foremost an internationalist. Having visited some 119 countries in his years in banking and public service, he strongly believed that the world is becoming more and more interdependent. Even in retirement, he remained an active member of the World Affairs Council of Northern California, and he thinks a global perspective is critical for tomorrow’s business leaders.
“The world has become increasingly small, and world affairs increasingly important,” he declared. “I’m hoping the next generation of managers has a deep understanding of this fact.”
He was also, though he disavowed the term, something of a quiet altruist. At Bank of America, he was instrumental in establishing a $100 million home loan fund for minority neighborhoods. In addition, Mr. Clausen personally contributed large sums to institutions of higher education, and he sponsored disadvantaged students at a local charter school, as well as several students in developing countries.
Giving back: Just common sense
For Mr. Clausen, giving back in this way was just common sense. He could trace his experience with informal “neighborhood philanthropy” back to his youth in Hamilton. “Growing up, I could see what my mother and my father, in particular, did to help disadvantaged people in our community,” he said. Both the church and the Kiwanis Club worked to help those in need, and Mr. Clausen recalled that toys didn’t spend much time in his house before they were gathered up and passed along to less fortunate children, particularly at Christmastime. Throughout his banking career, he added, he has “worked in the vineyards” of the United Way, eventually becoming national chair of its Long Range Planning Committee.
He brought the same passion for decentralization to the United Way that he advocated at Bank of America. “I wanted to localize planning because the leaders at headquarters of United Way, in Alexandria, Va., don’t know what our needs are here in the Bay Area,” he said. “I’m a decentralist and I always have been, both at United Way and at Bank of America. Local communities or entities should have the authority to handle a certain amount of decision making on their own, without having to involve the higher levels of the organization.”
Mr. Clausen regarded ethics as a “terribly important” part of business education and practice. As CEO of Bank of America, he recalled, he instituted training programs in ethics for the top officers of the bank. Groups met to discuss issues of correct and incorrect behavior, “what was right and what was wrong,” recalled Mr. Clausen. “Ethics is basic and should be viewed as such.”
Working for a better world
Mr. Clausen was also a strong advocate for lifelong education. “You can’t identify any problem in the world — any issue, complicated or simple — that a better-educated constituency can’t help find solutions for,” he said. “Education is key.”
Mr. Clausen recalled that his father was a lover of books and had an extensive library. Mr. Clausen himself also has a sizable library and reads extensively. “Even at 80 years of age, I’m still investing in my future by reading a lot and thinking about what I read,” he said. “It’s an important way to work for a better world for all of us.” Of course, he added, education isn’t restricted to only formal institutions of learning. “There are lots of ways to become an educated person,” he said. “Abraham Lincoln, a trustee of Carthage College, was a great man and well-educated, but he didn’t have a college degree.”
Finally, given his record of achievement, it comes as no surprise to learn that Mr. Clausen saw business as a positive force for good in the world.
“We owe a moral debt to those who came before us and a moral obligation to those who will come after us to continue building this society. This debt and obligation cannot in any meaningful way be separated from business.”
— Eric Skjei, for Carthage College